France: 2012 Article IV Consultation--Concluding Statement
11/06/2012 FMI" The growth outlook for France remains fragile reflecting weak
conditions in Europe generally, but the ability of the French
economy to rebound is also undermined by a competitiveness problem.
As financial stability risks abate, and with the prospects of a
gradual resolution of the euro area crisis, France’s
competitiveness gap emerges as the main challenge for macroeconomic
stability, growth, and job creation. The government has rightfully
launched a broad debate on the subject and has engaged social
partners in a dialogue on critical reforms. This creates a unique
opportunity to achieve meaningful reforms. The government has also
demonstrated strong fiscal resolve, which has helped anchor market
confidence. Going forward, policy priorities should be: (i) quality
fiscal adjustment, based on a stronger containment and
rationalization of public spending to improve its efficiency and to
create room for a reduction of the tax burden over the medium term;
(ii) reforms of the labor market and services to reduce costs,
increase the capacity of enterprises to invest and adapt, and
create more efficient and inclusive outcomes in terms of growth and
employment; and (iii) a rationalization of the taxation of
financial income to ensure an adequate flow of long-term (including
equity) financing to enterprises."
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